I'm a little confused by the rumored manufacturer. Toshiba, of course, was behind the competing HD DVD format, which Microsoft originally backed.

The story offered some additional detail, or speculation, on pricing and factors that may influence when Microsoft would bring an external drive to market.

I fired off an e-mail to Microsoft's Xbox PR people, but they tend not to comment on rumor. If they do, you'll read it here.

Microsoft has not offered a high-definition DVD option on its game console since it discontinued its external HD DVD format drive after Sony's Blu-ray beat out Toshiba in the next-generation format war earlier this year. The best it could do was tout the console's ability to play DVDs in "near high-definition using the upscaling capabilities of Xbox 360."

Microsoft's external HD DVD drive sold for $130. Sony's PlayStation 3 has a Blu-ray drive built in, keeping manufacturing costs for the console high and limiting Sony's ability to cut prices, analysts have said.

Incidentally, I was interested to learn more about X-bit labs, the source of this rumor. It's an English-language hardware review site that got going in Moscow in 2000. Here's what happened next:

"Despite the recognition we received and the positive feedback we got, there was still one very serious difficulty, which prevented us from growing further. X-bit labs team was physically based in Russia, namely in Moscow, but we targeted our contents specifically at North America and all English-speaking people worldwide.. However, the confusion about us being from Russia but having no business in the Russian market was really frustrating.

"So, we decided to solve the matter once and for all. From July 2002 the headquarters of X-bit labs has been officially moved to the United States. At this time X-bit labs has three test facilities physically located in three different parts of the world. One of our biggest testlabs is still in Russia, Moscow, another one is certainly in the US (California) and the third test facility, which is our primary Video lab, is based out of Tallinn (Estonia).

"Right now X-bit labs is one of the top three hardware review sites out there with close to 1.8 million unique readers every month and continues to grow thanks to the great talented engineers working on the project full time."